In this article we look at how to maximise your chances of resolving the dispute without needing to resort to a formal dispute resolution process.
Disputes are an inevitable part of business. The fact that a dispute has arisen should not reflect badly on the business. How the business deals with it may do. Important business relationships, money and reputations can be lost. On top of that, the outcome of litigation is never certain. So how should a business deal effectively with disputes that arise, whilst minimising the downside risks?
Here we set out 10 tried and tested ways to achieve Early Dispute Resolution:
- Acknowledge the problem and immediately begin to address it.
- If your contract has an escalation procedure to deal with disputes, you should use it. These processes are often successful in achieving resolution. They work by a combination of escalating the discussion beyond the stakeholders who were personally involved in the dispute, providing a defined process and enabling greater understanding of the other party’s version of events (as well as your own). They also allow the parties to retain control of the outcome of the dispute.
- Assess the strength of your position. Gather the key facts and documents. Review what has happened, analyse the problem and the strength of your legal position.
- Consider your optimum outcome. Then, consider the range of acceptable outcomes, running from most to least acceptable.
- Consider the wider commercial context. Can you settle the dispute as part of a wider commercial arrangement, such as extending the contract, offering reduced rates for future work?
- Based on that analysis, formulate a clear, realistic and achievable strategy to achieve your range of optimum outcomes.
- Engage constructively with the other party. Keep a line of communication open with the other party. Try to arrange face to face meetings to try to resolve the issues. If necessary, any meetings can be on a without prejudice basis (which will mean that anything said at the meeting cannot be used in Court, should it not prove possible to resolve the dispute).
- Ensure that you position yourself in the best possible way in correspondence. Do not make any unnecessary or accidental concessions.
- If you do resolve the dispute, make sure that you have a clear agreed written record of what was agreed, in order to avoid a further dispute about what was agreed. Often, it will be best to record the agreement in a binding settlement agreement, particularly if the dispute was high value, long running or business critical or any one or more of these.
- If direct discussion with the other party fails to result in settlement of the dispute, consider proposing mediation. (This is a form of negotiation to resolve a dispute, facilitated by a paid, independent third party). You can engage in mediation before legal proceedings have been threatened or issued, and mediation can often break a deadlock that simple face to face negotiations have failed to resolve. You should consider carefully who will attend the mediation. You will need to ensure that it is attended by someone with authority to settle the dispute and that those who attend are able to deal with any factual debates that arise. You will also need to ensure that those who attend are fully prepared.
We can assist you in this process. Our Early Dispute Resolution service provides a structured and tested way to achieve early settlement of commercial disputes. We adopt a straightforward, proactive approach, creating a strategy which includes both the legal aspects of the dispute and the commercial implications. We can advise you behind the scenes or represent you in negotiations or mediation.